P. L. BAPUSWAMI versus N. PATTAY GOUNDER

Citation: [1966] 2 S.C.R. 918 · Decided: 07-12-1965 · Supreme Court of India · Bench: P.B. GAJENDRAGADKAR · Disposal: Appeal(s) allowed

Cited by 4 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

P. L. BAPUSWAMI 
v. 
N. PATIAY GOUNDER 
December 1, 1965 
[P. B. GAJENDRAGADKAR, 
C.J., 
K. N. WANCHOO, V. RAMASWAMI 
AND P. SATYANARAYANA RAJU, JJ.) 
Transfer of Property Act, 1882, s. 58(c)-Distinction between mort-
gage by conditional sale and a sale with a clause for repurchase. 
A 
B 
M executed a document Ex. B-1 on May 28, 1946, in respect of his 
C 
half share in certain lands in favour of the defendant for a consideration 
of Rs. 4,000/-. The document was in the form of a sale deed but it 
contained a stipulation that the defendant should reconvey the property to 
M on his repaying the amount of Rs. 4,000/ - after five years and before 
the end of the, seventh year. After M's death his sons executed an assign-
ment deed in favour of the 
plaintiff in August 1950 for a sum of 
Rs. 1,600/- and on the basis of this deed, the plaintiff filed a suit for re-
demption of the disputed property. He claimed, inter alia, that Ex. B-1 
D 
must be deemed in law to be a mortgage by conditional sale and that he 
was entitled to redeem as the assignee of the equity of redemption; or 
alternatively, that Ex. B-1 was a sale with a condition to repurchase and 
the defendant was bound to reconvcy the property to him on payment of 
Rs. 4,000/ - and that although this amount had been tendered several 
times, the defendant had refused to accept it. 
On the other hand the 
defendant denied that Ex. B-1 was a mortgage by conditional sale and 
contended that it was an outright sale with a covenant for 
repurchase 
E 
find as the plaintiff did not tender the amount within the time stipulated 
in the document, the suit was barred by time. 
The trial court held that Ex. B-1 was a mortgage by conditional sale 
and granted a preliminary decree; but the High Court, in appeal, revers-
ed this decision. 
On appeal to this Court, 
HELD : Ex. B-1 was a transaction of mortgage by conditional sale 
and not a sale with a condition for retranofer. 
F 
The question whether by the incorporation of a condition a transac-
tion ostensibly of sale may be regarded as a mortgage is one of intention 
of the parties to be gathered from the language of the deed interpreted 
in the light of the surrounding circumstances. The definition of a mor<t-
gage by conditional sale postulates the creation by the transfer of a rela.. 
tion of mortgagor and mortgagee, the price being charged on the pro-
perty conveyed. In a sale coupled with an agreement to reconvey there 
ls. no relation of debtor and creditor nor is the price charged upon 
the 
G 
property conveyed, but the sale is subject to an obligation to retransfer 
the property within the period specified. 
The distinction between the 
two transactions is the relationship of debtor and creditor and the transfer 
being a security for the debt. [921 C-F] 
In the present case the following 
circumstances indicated that the 
transaction was a mortgage by conditional sale :-
(i) As required by the proviso to s. 58(c)., the condition for re-
H 
purchase was embodied in the same document; 
(ii) the consideration for Ex. B-1 was Rs. 4,000/- while the real 
value of the property was Rs. 8,000/ -; · 
BAPUSWAMI v. P. GOUNDER (Ramaswami, J.) 
919' 
A 
(iii) the patta was not transferred to the 
defendant after the 
execution of Ex. B-1 by M; 
(iv) M, and after his death, his sons, continued to pay kist for the 
land; and 
( v) the consideration for reconveyance was the same amount as 
the consideration for Ex. B-1, i.e. Rs. 4,000/-. [923 B-G] 
B 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 798 of 
1963. 
Appeal by Special Leave from the judgment and Order dated 
.Oi. 
the 19th August, 1960 of the Madras High Court in Second· 
Appeal No. 871 of 1958. 
( 
' 
c 
R. Ganapathy Iyer, for the appellant. 
C. B. Agarwala and R. Gopalakrishnan, for the respondent.. 
The Judgment of the Court was delivered by 
Ramaswami, J. 
This appeal is brought, by special leave, on 
behalf of the plaintiff from the judgment of the High Court of 
D 
Madras dated August 19, 1960 in Second Appeal no. 871 of 
1958. 
The disputed property consisted of 16 acres and 27 cents of 
land in Sokkanur village of Coimbatore district of which half 
share belonged to Palani Moopan and the other half to his 
E daughter Palani Mooppachi. 
Palani Moopan executed the 
document-Ex. B-1 with regard to his share of the property in 
favour of the 1st defendant for a consideration of Rs. 4,000/-
on May 28, 1946. Out of the consideration, a sum of Rs. 2,000/-
was reserv

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